The net asset value (NAV) of EfTEN United Property Fund was 10.57 euros at the end of December, decreasing by 0.8% over the month. The decrease in NAV was related to the regular valuation of the fund’s investments by Colliers International at the end of the year. The valuation reflects record high EURIBOR levels and does not affect the fund’s actual cash flows as well as income distribution capacity.
Due to the high occupancy of the buildings and the fund’s relatively large share of uninvested capital, the downward valuation from higher interest rates was significantly smaller compared to most other European real estate funds. In addition, the increase in the value of the fund’s Uus-Järveküla residential development project compensated for the valuation decrease in commercial real estate. In December, the first seven terraced houses were handed over to clients in the residential area of Uus-Järveküla (real right contracts were concluded). According to the international financial accounting standards (IFRS), the profit from the sale of real estate is recorded at the time of the conclusion of real right contracts. In total, as of the end of January, 70 terraced and semi-detached houses have been booked, sales contracts under the law of obligation have been signed or fully handed over to clients.
The fund’s commercial real estate investments maintained a positive cash flow in 2023, which allows the fund to continue distributing regular income in 2024. As of now, the fund management company plans to make two distributions to investors from the EfTEN United Property Fund in the coming year. The first in the late spring, when the dividends from the underlying funds have been received, and the second in the fall, when the interest earned from the investments made in the form of loan capital is received and the additional funds will be released by the possible refinancing of the loans.
